UK businesses improved their payment performance for the fifth time in the last six months in January, according to the latest Late Payment Index from Experian.
Businesses, on average, paid their bills 20.74 days after agreed terms in January 2010, an improvement of over two-and-a-half days on January 2009.

The biggest improvement in payment performance came from the UK's smallest businesses and London businesses improved the most on a regional basis, seeing an 18.3% decrease in the amount of time it took them to pay.

Businesses In the South West were the fastest payers on average in January, paying bills 16.27 days beyond terms. Businesses in the North West were the worst (24.33 days beyond terms) and larger organisations (with more than 501 employees) are still the slowest at 36.36 days.

Non-food retailers have shown an 8% decrease in the amount of time they take to pay their bills, paying them19.82 days beyond terms.

Experian's Head of Commercial Credit Joe Myers said: "The improvements in payment performance suggest that firms are becoming less inclined to delay payment as a way of managing for cash. This benefits everyone, not least the paying firm itself as it will reflect well in their credit score. Having a better credit score means they are in a better position to negotiate improved terms as well as raise credit from alternative sources or suppliers."